I know that Washington, DC is not Senator Dick Durbin’s constituency, but he needs to keep in mind those who are listening to his comments when he decides to open his mouth. In what might be considered his latest gaffe, Dick took a swipe at the DC Metro population by commenting on their reaction to the recent snow storms. He said:

I am convinced that infants born in Washington, D.C., are taken from the arms of their loving mothers right when they are born into a room where someone shows a film of a snowstorm with shrieking and screaming so that those children come to believe snow is a mortal enemy, like a nuclear attack, because I have seen, for over 40 years here, people in this town go into a full-scale panic at the thought of a snowfall.

So, according to Dick, the residents of the DC Metro area are cry babies when it comes to snow. Maybe Dick would like to know that the population of the DC Metro area is made up of individuals from all over the world. Some of these people come from areas like Chicago, where snow is a way of life. Others come from Hawaii, where snow is something you see on television (unless you travel to the Big Island). And still others come from as far away as Africa, India, and Singapore. This unique population may have never lived in a region that snowed, let alone driven in it.

Maybe Dick should engage his mind next time before he openly insults millions of people in a gross overgeneralization.

In some ways, the Republicans had both the easier and harder task in their response to President Obama’s State of the Union address. Easier in the sense that they didn’t have to go into specific on the various issues, but harder because they had only a limited amount of time to respond and that they were following the President himself. Taking a look at Virginia’s Governor Bob McDonnell’s speech, I come away with the following thoughts.

McDonnell opens his response by addressing the history of Virginia and his political lineage to Thomas Jefferson (the second Governor of Virginia). Speaking from the Congressional Hall designed by Jefferson, McDonnell quotes Jefferson from his first Inaugural address, saying “a wise and frugal Government … shall leave [men] free to regulate their own pursuits of industry … and shall not take from the mouth of labor the bread it has earned.” The purpose of these constant references to Jefferson, other than to highlight the position Jefferson had about a limited Federal government as well as his history to Virginia, is because Jefferson remains one of the Democratic Party’s icons. By linking himself to Jefferson and to small government, he is creating an image of how the Democrats have drifted away from their historical positions.

The first main topic McDonnell discusses is the current unemployment rate in the country. Chastising the currently Democratic-led Congress and the President over their economic proposals, he stresses that the best way for the economy to recover and for jobs to be created is by easing the burden on US companies. With proposals such as the $1 Trillion Health Care Reform proposals in Congress and the economic stimulus packages that will increase our national debt, McDonnell stresses how the economic burden will become too great for the nation. He highlights the Republican proposals on Health Care Reform that achieves similar goals as the Democrats without the large cost or complex legislation.

Switching the topic to energy, McDonnell references Obama’s comment on domestic energy production and Obama’s obstruction for nuclear power and oil exploration expansions. This expansion will lead to more jobs, meaning the need for a new educated workforce. He segways into discussing the need for student choice in schools and the need to award teachers for their “excellent performance.”

He concludes by addressing national security last. There were concerns about the President being too soft on national security when he entered office. McDonnell applauds Obama’s decision to provide additional support to the troops in Afghanistan as well as the successes of our troops in Iraq. Some recent events however, such as the Detroit plane bomber and the decision to try terrorists in the shadow of the World Trade Center, have justified some of their doubts about his ability to protect the nation.

It was a brief speech, but I think it was the best State of the Union response we’ve seen in quite some time. Bobby Jindal’s comedic response last year, as well as Tim Kaine’s head-scratching “there is a better way” mystery from four years ago have taken the credibility of the response away until the other night. The decision to hold the response in front of a live audience (even though they were all McDonnell supporters) was a good choice, especially since it gave the impression of a similar forum that the President enjoyed. However, as with all responses, the speech was light on details and over-generalized.

One of the best aspects of covering these speeches is to hear the give-and-take between the various parties. While debating political issues with people of all stripes, we can identify when someone is trying to spin an issue and when someone is being serious trying to resolve the issue. Both Republicans and Democrats are guilty of spinning, as Obama did with discussing the debt and McDonnell with national security. However, both are also serious about seeing the nation improve. While political ideologies are hard to work with, there is enough common ground on issues where I think the politicians can work together to leave our nation in a better condition than they found it. Small, targetted reforms will achieve this goal, but only if the politicians are willing.

As I start this, I’m staring at a 7,446 word, 11-page speech that lasted 70 minutes last night during primetime. For every word, I could probably write ten of my own, so I am going to tackle some of the major points rather than go piece by piece. That and I don’t think you want to read a 74,460-word article.

The first portion of President Obama’s speech focused on the economy. Highlighting the unpopularity of the bank bailout program that was started under President Bush, Obama sites the anger and frustration many had over spending government funding to keep the banks open. Noting how most of the funds used in the bailout have been recovered, he stressed how he has proposed a fee to recover the rest. According to Reuters, $545 Billion of the original $700 Billion was allocated to various financial institutions, with $375 Billion actually being distributed.

Many banks have already repaid part or all of their loans, and the nation is gaining interest and dividends on outstanding holdings. The fee in question will be 0.15% on covered liabilities for banks with more than $50 Billion in assets (approximately 35 banks at the moment). Projections show a return of $90 Billion over 10 years. However, with the government receiving returns on current investments, why do we need to institute the fee? And, what if we recoup all of the losses in 5 years, especially if more banks cross the $50 Billion threshold? Will the government cancel the fee? I doubt it.

The reason I doubt that the fee will be cancelled comes from Obama’s next major point. He wants to redirect $30 Billion from bank repayments to use infuse community banks so they can make loans to small businesses. If you remember, the TARP funds were to help banks make loans initially, with some banks forced by the government to accept funds even though they didn’t need it. So if the government is going to repeat the same process, will there be a different end result than now? In addition to the $30 Billion, the President calls for tax credits for small businesses who hire new workers or raise wages, eliminate capital gains taxes on small business investments, as well as tax incentives to businesses to invest in new plants and equipment. While no specifics were provided, the total for these initiatives could reach $50 Billion in the first year (no time frame was provided, so I don’t know if this is a one year or multi-year proposal). With such an expense, the bank fee would have to remain in place if the government is going to slow/reduce the growing national debt.

Towards the end of his speech, he went back to talking out the economy and the debt. Outlining his goals to repay the debt he amassed in 2009, he started by calling for a freeze on discretionary spending starting in 2011 (based on the impression that the economy will be better in one year). The cap on spending is based upon the current budgetary levels which are already much greater than where they were when he entered office. Because of this, the spending cap won’t make much of a difference in the bottom line. If he were to cap it at where the 2009 budget was when he entered office, he would make a much larger cut in the debt, especially with the costs associated with the Iraq war come to a close, meaning there is more than enough money for the government to operate.

He continues by noting $20 Billion has been identified in savings for this year, but when you consider that he wants to spend $30 Billion for small business loans (as noted above), he’s already in the red on his cost savings proposal. To off-set this, he wants to end the tax cuts on people making $250K which he campaigned on in 2008. Additionally, he wants to end tax cuts on oil companies. However, he said earlier in the speech that he would provide tax incentives to businesses that invest in new plants and equipment, so the net savings would probably be offset. Lastly, he calls on the reinstatement of PAYGO, which he credits as “a big reason for why we had record surpluses in the 1990s” (though the tech bubble leading to record tax receipts as well as savings from the ending of the Cold War had more to do with it than government spending). I won’t go deeply into PAYGO since I’ve already written how it is an inferior policy in a prior article.

Moving from the economy to national projects and infrastructure, the President called for the next generation of domestic energy production and high-speed rail service. In regards in energy, Obama said the nation needs new nuclear power plants, opening new offshore locations for gas and oil development, investments in biofuels and clean coal technologies. Much of this has been the rally cry for Republicans as well as many states for some time, and the President was obviously playing up to that side of the hall. However, he was also setting up the right by going right into calling for the passage in the Senate of the cap-and-trade legislation that the House passed last year. Obama has constantly said he was open to increased nuclear power, especially since he wants to expand the electric car market during his time in office, though he has been reluctant of actually allowing expansion to begin. On the other hand, he strongly supports taxing emission-producing power plants while creating an artificial “carbon credit” market. He misses the point that you can simply change the emission regulations and offer tax incentives to companies to modify existing power plants (which will increase jobs as well as tax revenues).

He continued by stating how the country needs to move from a bystander on the global warming debate to the global leader. Citing how there is debate over the climate change “evidence,” he attempted to change the discussion simply to the need to transition to the next generation of energy, especially if it can lead to a good that can be exported. This has been position that most people (Democrat, Republican, and Independent alike) have shared for years, but the political debate has held back progress. If the President would drop the cap-and-trade portion of the energy regulation reform and became more proactive about allowing nuclear and oil/gas production expansion, both he and the nation can realize the end of dependence on foreign oil.

In regards to transportation, the President highlighted the need for high-speed rail service here in the United States. Comparing us to Europe and Asia, where they have taken advantage of high-speed rail for decades, he notes how our transportation infrastructure has allowed us to be competitive in the global markets and lead to business growth. There is a high-speed rail project proposed in Florida linking Tampa to Orlando (approximately 80 miles), with a future connection to Miami (approximately 230 miles) by 2017.

The initial route is projected to cost $2.6 Billion, though concerns are that the line won’t generate enough revenue to repay the investment. There are other high speed projects in the nation as well. Unfortunately, there is a problem with this program, which is why it hasn’t been implemented in the past. High-speed rail service would be difficult to bring to the New England states because of the lack of space. It would cost billions to purchase land rights through crowded 200-year-old cities for new lines, since these trains cannot run on existing tracks. Additionally, there are two mountain chains the divides the nation into thirds, making transcontinental high-speed rail service financially impractical. The Acela service offered by Amtrak (a government funded, financially insolvent company) is about as fast of a practical passenger rail service that our nation can imagine while being cost effective. For faster service, regional air carriers are the better option.

The President commented on other issues, such as the stimulus bill, national security, and health care, but I think the last item I’ll cover in this article is education. In what is probably the most interesting proposal of the night, the President wants to end the practice of funding financial institutions to offer/manage financial aid loans. Instead, he proposes a $10,000 tax credit for families for a four-year college education as well as capping how much they have to pay on their student loans. Limiting the maximum payment to 10% of the students income for 20 years (10 years if the student enters public service), he proposes that any remaining balance on the loan be written off. It will be interesting to see the details on this proposal, since I don’t know if the annual/total loan limits will be increased or decreased, nor do I know if there will be changes on who will be eligible for PELL grants and how much they will receive. In the end, there is a possibility this becomes another unsustainable program such as Social Security, meaning that it will continue to add to the debt of the nation (but only 20 years from implementation, and long after he is out of office).

There wasn’t much about this speech that surprised me, and the majority of it was a rehash of his campaign and public speeches from the past two years. He did make many references to the Senate since they have not acted as fast as the House. As a former Senator, he should understand that the Senate’s role is to help temper the frenzy of the house, which is why a Senator’s term is six years while a Representative’s term is only two. Additionally, this focus on the Senate has to do with the loss of the 60-seat super majority the Democrats enjoyed over the past year. Obama is now in a position where if he wants major pieces of legislation to pass, he has to have Republican support. Up till now, he had a hard enough time simply getting all of his party members to fall in line, meaning that if much of his proposals in last nights speech fail to come to fruition, he can blame the Republicans for obstructing his vision of progress.

Overall, I give the speech a B, since the overall theme of the speech was on the economy, and he linked most of his points to jobs or the economy in one way or another. He lost points for his inappropriate chiding of the Supreme Court (who sits in these speeches out of courtesy) and for being too long. It will be interesting to look back to this speech in December to see what he has or has not achieved over the next 11 months.

I will address the Republican response tomorrow.

The blizzard of 2009 passed through my neck of the woods, dumping over 20 inches of snow on my house (and my car) starting Friday night and ending Saturday night. This is the largest snowfall we’ve had since the blizzard of 1996. In both 1996 and 2009, I was fortunate enough not be traveling at the time (as you can tell by my snow-covered car). Unfortunately, thousands of our citizens and residents were, with many of them ending up in car accidents.

Reading through the news today, the accident totals are just mind boggling. Here is just a sample of the accident totals I’ve read about:

Surry County, NC:  More than 300 accidents
Haywood County, NC:  Almost 1,000 accidents
Virginia:  More than 2,900 accidents

It is hard to put all the blame on the drivers, as blizzard conditions can mask road hazards such as black ice, potholes, unmarked or poorly marked lanes, and so on. However, much the drivers share the bulk of the burden for driving too fast, breaking too hard, tailgating, and simply being on the road when they didn’t need to be. Many of these accidents are easily avoidable, but result in increased insurance premiums for them and us alike. Hopefully they were carrying quality car insurance at the time.

These accidents remind me of the 100-car pile-up in Virginia back in 2001. A sudden whiteout masked I-95 Southbound in the Prince William County/Stafford County region. What started out as a single accident between a car and a semi led to a chain reaction of 100 cars running into the cars in front of them due to the lack of visibility and slippery road conditions. I had an employee who was traveling Southbound at the time who was stuck behind the mess, taking my employee an additional three hours till they made it home.

In the future folks, please pay attention to the road conditions, and stay home if at all possible. If you do have to go on the road, turn on your headlights (not just your daytime running lights), slow down, and keep a wide gap between you and the car in front of you. Responsible driving will reduce your odds of getting into a car accident and save your money in the long run.